The amount of jobs created in the last month of 2013 failed to satisfy projections. The emergency unemployment insurance program expired last week as well. The nation can still feel the effects of the recession that ended in 2009. Despite these setbacks, economists remain calm.
The 74,000 jobs created in December fell 126,000 short of original goals, but the national unemployment rate fell from seven to 6.7 percent. According to the Bureau of Labor Statistics, the labor force fell to 62.8 percent, the lowest since 1977. Hourly earnings averaged $24.17 and employees worked a mean of 34.4 hours a week.
On Jan. 7 the Senate, led by Democrats, voted to proceed with a bill to temporarily extend emergency unemployment insurance. President Obama said he would sign as soon as the bill makes it through the House of Representatives, but the bill has not yet made it that far.
While December’s setbacks may seem disheartening, Dr. Robert Godby, an associate professor in the College of Business Department of Economics and Finance, says not to look at the monthly reports.
“Most economists expect this number to get revised upwards,” Godby says.
Statistical errors likely occur when dealing with such large numbers and such small sample sizes. The unemployment report, which measures labor force participation, only looks at 60,000 households around the country every month. The establishment survey, much larger than the household unemployment report, still only covers 140,000 businesses in the nation.
The trick, says Godby, is to look at the overall trend instead of the monthly. December, for example, hosts a high retirement rate with people taking their accumulated sick days before calling a quits at the end of the year. Sometimes, unemployed people quit job searching for the month to spend time with family. The factors causing statistical errors abound.
Luckily, the effects have yet to reach Wyoming as heavily as they have states such as Rhode Island, who’s unemployment rate of nine percent placed it last in the U.S.
The Cowboy state maintained a healthy average of 4.4 percent unemployment, a fraction lower than last year.
“If you’re unemployed in Wyoming and can’t find a job, you wouldn’t stay here,” Godby says.
The weather is cold enough to scare the homeless into warmer, more populated regions, and the barren plains offer little opportunities for unspecialized work.
Still, the effects of the recession reverberate through the national job landscape. Disability insurance, aging baby boomers, labor-force dropouts, returning college students and a decline in manufacturing jobs all shoulder a bit of the blame.
Unemployment benefits receive the most criticism. Without this new extension however, every week could take money out of the hands of another 72,000 people; people who need to spend money to stimulate the economy. Without consumer spending, the downward spiral takes on a quicker pace.
“The government is doing what it can to stimulate the economy, but that has brought us into a lot of debt,” says Thorsten Janus, an associate professor in the Department of Economics and Finance. “They’ve done, in some sense, almost everything they can,” but “there are limits to what the government can do.”
Unemployed benefit plans affect the government’s debt and ability to stimulate the economy. When workers get back to their jobs, the aging baby boomers will shoulder most of the lasting affects.
The largest generation is reaching the age of retirement. The job market left in their wake, however, is wholly different than the one they came into.
The modern environment calls for more high tech skills and higher educational achievement. A bachelor’s degree no longer ensures the same amount of employment and fiscal security.
According to Janus, as the baby boomers drop out of the market, the labor force will greatly decline. Hopefully, this allows more people from the millennial generation to attain jobs.
What can new graduates do to prepare themselves for this harsh, but developing job market?
Janus stresses that further higher education is always a good idea. He also advises people to utilize all their resources, both technological and social, as well as being willing to try new jobs and move.
Godby emphasizes the importance of finding a degree that works for both the student and his or her environment. He advises not accumulating debt in expectations of a high-paying job right after graduation. Moreover, Godby maintains that creativity is a must in the ever-developing market, as well as an ability to adapt.
